As the peak season for 2024 ramps up, this article delves into UK online retail trends, highlighting IMRG’s latest data on sales growth, category performance, website traffic and conversion rates. The data is drawn from IMRG’s e-commerce index, where we take in sales figures from 220 retailers every week, with the revenue sample totaling £25bn (US$32bn).
Growth in September 2024
The online retail market has faced a challenging period post-pandemic, with continued revenue declines since April 2021. However, September 2024 showed the first sign of growth in 41 months, with a 3.6% year-on-year (YoY) increase. This was driven by impressive performance in the first two weeks, coinciding with the back-to-school period after the summer holidays, achieving 11.8% YoY and 11.6% YoY, respectively. The market’s positive momentum even extended into October, with the first week recording growth of 2.5% YoY.
However, the second and third weeks of October saw declines (-3.7% and -4.7% YoY respectively), suggesting recent growth may be an anomaly, or that customers were holding off until November to take advantage of Black Friday deals. This may have influenced a surge in Black Friday campaigns going live in late October this year.
Performance feels like it is on a knife edge. Will those long Black Friday campaigns generate results? Is shopper confidence slowly returning? Or will trading remain fraught as it was before?
Key metrics trends
The tough trading environment has not been consistently felt across all categories. Health and beauty has led category growth in 2024, with fragrance sales particularly strong – up by 20.1% YoY in September, driven by a 78.7% YoY increase in the first week. The beauty and hair care subcategories have also experienced strong growth this year. In contrast, results for electricals and home and garden retailers have been mixed, while the clothing and gifts sectors have seen declines in most months this year.
On a more positive note, traffic to retail sites has been increasing recently following a long period of decline across 2023 and the first half of 2024. In a simple sense, more visitors to retail sites means more opportunities to convert them. We have recorded some signs of improvement in this area: conversion rates rose from 3.13% in October 2023 to 3.22% in October 2024. It might be a small increase on the same time last year, but every percentage of a percentage point can be significant when it comes to arresting a declining market.
Black Friday forecast
IMRG’s Black Friday Tracker shows the following trends for previous years:
- 2021: -10%
- 2022: +0.3%
- 2023: -1.9%
Recent Black Fridays have been affected by external factors, including the cost-of-living crisis, delivery and supply chain disruptions and major sporting events, all of which have contributed to declines or flat growth. Black Friday figures fell so sharply in 2021 because the 2020 event happened during a pandemic lockdown.
For Black Friday week 2024 IMRG anticipated a modest decline of -1%. While online revenue remains in flux, the moments of growth leading up to Black Friday and the peak month of December, coupled with positive factors such as the end-of-month payday and stabilizing interest rates, provide a hopeful, if not entirely confident, outlook for a relatively stable trading period.
This article was published in the December 2024 issue of Parcel and Postal Technology International magazine – available online soon!